MARKETS USA / Inconsistent – Nasdaq slides deep into the red after Fed statements | 16.09.20

NEW YORK (Dow Jones) – Wall Street initially reacted only slightly to the willingness of the US Federal Reserve to continue to provide massive support for the economy, but prices came under increasing pressure as the year progressed. The Nasdaq index had already lagged noticeably before the statements by the US Federal Reserve, but then slipped lower in later trading.

The Dow Jones index gained 0.1 percent to 28,032 points, while the S&P 500 lost 0.5 percent. The Nasdaq composite was down 1.3 percent. There were a total of 1,889 (Tuesday: 1,652) course winners and 1,129 (1,366) losers. 77 (85) titles closed unchanged.

As expected, the Federal Reserve has confirmed its willingness to provide massive support to the US economy. The coronavirus pandemic will burden the economy in the short and long term, it said. The central bank signaled a very loose interest rate policy close to zero until 2023.

As previously expected by economists, the key rate was left at 0.00 to 0.25 percent. In addition, the purchases of bonds are to continue “at least” in the current volume, that is, government bonds worth $ 80 billion per month and mortgage paper for $ 40 billion.

The Fed recently decided to shift its strategy that gives it greater leeway in moving towards its inflation target. According to this, the inflation rate can remain above the ideal value of 2 percent for a longer period of time if this target value has been undershot for a long time. This gives the Fed more flexibility when deciding on the key interest rate.

Dollar a little firmer

On the foreign exchange market, only cautious reactions were initially felt to the statements of the US Federal Reserve. The dollar had been a little weaker before the statements, but was ultimately able to make up ground, which was expressed in a rise in the dollar index by 0.2 percent. The euro fell to a daily low of $ 1.1786 and ended up trading at $ 1.1803 against $ 1.1847 on Tuesday evening.

According to the Fed, the gold price initially rose to $ 1,969 from $ 1,961 before, but came back over the course of the year and was finally 0.1 percent higher at $ 1,958.

The oil price posted significant increases for the second day in a row. The official data on US crude oil inventories, contrary to expectations, showed a 4.4 million barrels decrease from the previous week, indicating higher demand. Gasoline stocks decreased by around 0.4 million barrels. The day before, the private American Petroleum Institute (API) had surprisingly reported a significant decline in inventories. But the hurricane season and the dollar that is tending to give way are also driving up prices. The price of a barrel of the WTI variety rose 5.0 percent to $ 40.21, and Brent rose 4.3 percent to $ 42.26.

US bonds were not in demand after the Fed’s statements. The yield on ten-year Treasuries rose 1.0 basis points to 0.69 percent as prices fell.

Fedex up steeply by numbers – Snowflake with a brilliant stock market debut

Surprisingly good quarterly figures helped the Fedex share to achieve significant price gains of 5.8 percent after the logistics group had exceeded market expectations with sales and earnings in its first quarter of the business year. At Adobe, too, sales and earnings were surprisingly good. However, the share was unable to capitalize on this and lost 4.4 percent. Market participants saw one reason for this in profit-taking, as the share has gained around 50 percent in value since the beginning of the year.

Facebook lost 3.3 percent. The US Federal Trade Commission (FTC) is preparing a lawsuit against Facebook because of possible violations of competition law, which could possibly be filed at the end of the year, the Wall Street Journal had reported, citing unnamed sources.

Raytheon advanced 2.4 percent. The group has announced the shedding of more than 15,000 jobs in the aviation business, around twice as many as originally planned. The company cited the effects of the corona pandemic on the aviation sector as the reason.

An IPO was also on the agenda. The shares of cloud software provider Snowflake made a brilliant debut on their first day of trading at a price of $ 245 per share, more than double the issue price of $ 120. Investors literally fought for the shares. The $ 245 opening price lifts Snowflake’s valuation to nearly $ 68 billion versus $ 33 billion at IPO. The stock closed at around $ 254, up 112 percent from the issue price.

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INDEX last +/-% absolute +/-% YTD

DJIA 28.032,38 0,13 36,78 -1,77

S&P-500 3.385,49 -0,46 -15,71 4,79

Nasdaq-Comp. 11.050,47 -1,25 -139,86 23,16

Nasdaq-100 11.247,60 -1,67 -191,28 28,79

US bonds

Maturity Yield Bp to VT Yield VT +/- Bp YTD

2 years 0.13 -1.2 0.14 -107.7

5 years 0.26 -0.6 0.27 -166.0

7 years 0.47 0.6 0.46 -178.1

10 years 0.69 1.0 0.68 -175.4

30 years 1.45 2.2 1.43 -161.3

Forex last +/-% Wed, 8:16 a.m. Tue, 5:30 p.m.% YTD

EUR/USD 1,1803 -0,39% 1,1844 1,1847 +5,2%

EUR/JPY 123,94 -0,78% 124,79 125,01 +1,7%

EUR/CHF 1,0744 -0,16% 1,0758 1,0762 -1,0%

EUR/GBP 0,9106 -0,93% 0,9188 0,9216 +7,6%

USD/JPY 105,00 -0,41% 105,27 105,51 -3,5%

GBP/USD 1,2963 +0,56% 1,2891 1,2858 -2,2%

USD/CNH (Offshore) 6,7541 -0,36% 6,7713 6,7806 -3,1%

Bitcoin

BTC / USD 10,985.51 + 1.24% 10,770.76 10,778.51 + 52.4%

ROHOEL zuletzt VT-Settl. +/- % +/- USD % YTD

WTI/Nymex 40,21 38,28 +5,0% 1,93 -29,8%

Brent/ICE 42,26 40,53 +4,3% 1,73 -31,5%

METALS last previous day +/-% +/- USD% YTD

Gold (Spot) 1.958,10 1.955,38 +0,1% +2,72 +29,0%

Silver (spot) 27.12 27.23 -0.4% -0.10 + 52.0%

Platinum (Spot) 970.25 977.95 -0.8% -7.70 + 0.5%

Kupfer-Future 3,06 3,06 +0,1% +0,00 +8,5%

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Contact the author: maerkte.de@dowjones.com

DJG/err

(END) Dow Jones Newswires

September 16, 2020 16:18 ET (20:18 GMT)

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